Role of lawyers in workplace investigations
Nick Ruskin K&L GATES
“The employer is not expected to conduct enquiries
with the forensic thoroughness or skills of a policeman
or lawyer” (Schaale v Hoechst Australia Ltd (1993) 47
IR 249; BC9304666).
This quote is from a 1993 Federal Court of Australia
decision and remains the position of the courts today.
See for example, the decisions in Morton v The Transport Appeal Board1 and Rogers v Millennium Inorganic
Chemicals Ltd.2 However, as will be discussed in this
article, the obligations imposed on employers in conducting workplace investigations remain onerous, and
what was previously thought to be an effective discharge
of an employer’s obligations would be unlikely to meet
the current standard.
In circumstances of employee misconduct or where
an employer receives a complaint (eg bullying, sexual
harassment or discrimination) from an employee, it is
important that employers conduct effective workplace
investigations that take into consideration the principles
of procedural fairness and natural justice and other
legislative requirements (eg unfair dismissal laws and
surveillance laws).
The first step: what to do when a complaint
is received
An effective complaint handling process would, in
most cases, require a response to any complaint received.
However, not all complaints need to be investigated.
Whether or not the complaint is investigated will depend
on the nature of the complaint.
If the matter is serious and urgent it may require
immediate investigation. For example, in cases of bullying, harassment and work health and safety matters
there would be a requirement for an investigation to be
conducted in order to comply with legislative safety
duties. In other cases, less formal processes may be
available.
Why conduct workplace investigations?
The circumstances where it is now expected that
workplace investigations will be conducted by an employer
include:
• where an employee has engaged in misconduct
which may result in the termination of their
employment;
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• where it is a term of the employee’s contract that
they will not be subject to disciplinary procedures,
including dismissal, unless there has been an
investigation into any alleged misconduct;
• where a complaint of discrimination or sexual
harassment has been made; and
• where there has been conduct which may result in
a breach of work health and safety laws.
However, there is no single or universal definition of
what constitutes inappropriate workplace behaviour. This
is because every place of employment has a different
workplace culture. For example, a service station may
agree that certain conduct is acceptable whereas an art
gallery may find the same conduct is unacceptable.
Therefore, an organisation needs to clearly define
what inappropriate behaviour in the workplace is. This
may be achieved through consultation with employees.
Assessing the complaint
When a complaint is made, it should be assessed to
ascertain:
•
•
•
•
What should be done with the complaint?
Who should deal with it?
Who needs to be informed about it?
What immediate response or action (if any) is
required?
Where an organisation has a complaint handling
procedure, the steps in that procedure should be followed.
Circumstances warranting an investigation
An investigation may be necessary in order to respond
appropriately, or to comply with internal or external
obligations.
There are two circumstances where an investigation
may be required:
• where a complaint is made, usually by an employee
about the behaviour of a co-worker (eg complaints
of bullying, sexual harassment and discrimination); or
• where management becomes aware of a situation
which requires investigation (eg breaches of policy,
breaches of confidentiality and theft).
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There is an important distinction between the two
scenarios that will affect how investigations are prepared
and carried out. Importantly, internal obligations in
relation to commencing in these circumstances may be
set out in complaint handling or disciplinary policies of
the organisation and these must be complied with when
making a decision to investigate.
Legal professional privilege
Regardless of whether the investigation is internal or
external, a decision needs to be made about whether the
investigation can and should be established under the
protection of legal professional privilege. This, of course,
should take place before any document is created, to
ensure maximum protection. If inhouse counsel is engaged
to carry out the investigation so as to obtain the
protection of legal professional privilege, it will be
necessary for him or her to demonstrate a necessary
degree of independence from the organisation despite
the employment relationship in carrying out the role of
investigator. In the circumstances of an investigation,
there may be a challenge to the notion that the inhouse
counsel has the requisite level of independence. Where
doubt exists, external legal advisors should be used.
However, is it necessary to protect an investigation
through legal professional privilege, and for how long
will that protection last? Often organisational policies
that ground the rights and obligations for the handling of
complaints (including an investigation) will specify that
the outcomes of the investigation, or a summary of
them, are to be provided to the parties. If an organisation
is to comply with its policies at the end of the investigation process by revealing the findings of the investigation, legal professional privilege is undoubtedly lost
because part of the investigation is revealed to third
parties which breaks the necessary protection. If that is
the case, privilege will apply during the investigation,
and if the investigation remains incomplete (eg it stops
because the employee has decided to take other steps)
then the witness material collected as part of the
investigation remains under legal professional privilege.
In the first arbitrated decision3 made by the Fair Work
Commission under the new anti-bullying provisions of
the Fair Work Act 2009 (Cth) that took effect on
1 January 2014, an employee alleged that she had been
subject to bullying by other employees making complaints about her and by the organisation conducting an
investigation about those complaints. The organisation
engaged a law firm to investigate the allegations using
the protection of legal professional privilege. The results
of the investigation were provided to the applicant and
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to the Fair Work Commission but the full report and
evidence were not. The employer in this case relied upon
legal professional privilege. It was not challenged because
the Fair Work Commission considered that it was able to
obtain direct evidence from the applicant and the organisation about the matters contained in the report and
therefore the report did not need to be revealed. In the
author’s view, the results of the investigation were
provided to those outside the wall of legal professional
privilege and therefore the report lost its protection. It
should also be noted that the Fair Work Commission
considered the engagement of an external party to
investigate the complaint by the other employees was
not unreasonable.
Up to a point, there is much to be said for the benefit
of engaging lawyers to carry out an investigation in
order to obtain the benefits of legal provisional privilege.
With the flurry of activity arising from the bullying
jurisdiction now vested in the Fair Work Commission,
there have been comments by plaintiff lawyers that the
barrier provided by legal professional privilege will
create unfairness and will be challenged because the
investigation will not be entirely independent. It is said
that within the walls of legal professional privilege the
external investigators can chat happily with the organisation and get an insight into the true picture as painted by
the organisation of the issues. The organisation can
encourage the investigator as to the way in which the
investigator might reach its conclusions, it can peruse a
draft report and provide comment on recommendations
that might flow from the report. Therefore, one can
expect that in the future, complainants who are legally
advised will not be content to allow the investigation to
be carried out by an external party without an endeavour
to obtain assurances about the true independence of the
process.
The advantage of engaging lawyers to carry out the
investigation is their ability to understand some fundamental investigation principles namely timeliness, confidentiality, rules of evidence and natural justice. This is
so as the need for more sophisticated workplace investigations grows given the nature of employee relations
and legislative change such as health and safety laws and
the bullying jurisdiction of the Fair Work Commission.
In this environment, costs are a factor. As indicated at
the beginning of this article, not every complaint needs
to be investigated and some can be conducted internally
by human resources professionals who are suitably
trained.
A serious complaint against the organisation or its
officers can be damaging but should not be compounded
by a poorly executed investigation that sinks the organisation deeper in the mire.
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Nick Ruskin
Partner
K&L Gates
nick.ruskin@klgates.com
www.klgates.com
2.
Rogers v Millennium Inorganic Chemicals Ltd (2009) 229 FLR
198; 178 IR 297; [2009] FMCA 1; BC200900017.
3.
Ms SB [2014] FWC 2104.
Footnotes
1.
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Morton v Transport Appeal Board (No 1) (2007) 168 IR 403;
[2007] NSWSC 1454; BC200710965.
inhouse counsel July 2014